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Profit from Processing Further Deaton Corporation manufactures products A, B, and C from a joint process. Joint costs are allocated on the basis of relative
Profit from Processing Further Deaton Corporation manufactures products A, B, and C from a joint process. Joint costs are allocated on the basis of relative sales value of the products at the split-off point. Additional information for Deaton Corporation follows:
A | B | C | Total | |
---|---|---|---|---|
Units produced | 32,400 | 21,600 | 10,800 | 64,800 |
Joint costs | $ 388,800 | $ 162,000 | $ 97,200 | $ 648,000 |
Sales value before additional processing | 648,000 | 270,000 | 162,000 | 1,080,000 |
Additional costs for further processing | 75,600 | 54,000 | 32,400 | 162,000 |
Sales value if processed further | 756,000 | 324,000 | 189,000 | 1,269,000 |
Required:
2a. For each of the three products (A, B, and C), calculate the differential benefit (loss) from processing the product after the split-off point rather than selling the product at the split-off point. (Loss amounts should be indicated with a minus sign.)
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